Should You Cash Out Your 401(k)?
“I would blow up the system and restart with something totally different.”
– Ted Benna, “father” of the 401(k), quoted in MarketWatch.com
As investors educate themselves about the financial advice that is accepted as “common wisdom,” many begin to realize that 401(k)s might not be the “retirement solution” they were assumed to be. Even Ted Benna, the man who popularized the tax loophole that turned into the 401(k) program, is very critical of what it has become.
Not much in life is truly “guaranteed.” We can’t guarantee the weather, what other people will or won’t do, the direction of the markets, or even if we’ll be around to see tomorrow.
And even most “guarantees” have exceptions.
Your purchase is guaranteed – but only for 30 days, or unless you drop the item, get it wet, or use it in a way that invalidates the warranty.
“Success is where preparation and opportunity meet.”
– Bobby Unser, Indianapolis 500 Champion
Do you have access to cash on demand? Or are you locking up your assets, or keeping them liquid? The answer may be influencing your prosperity more than you realize.
“You’re not getting old; you’re getting ready.”
-Ernestine Shepherd, the world’s oldest female competitive body builder.
The numbers are in, and people are living longer! The CDC calculates that overall life expectancy in the U.S. is presently 78.7 years, with women outliving men by an average of 5 years, or 81 years vs. 76 for men. (Longevity is one area where there is no gender equality.)
“Aging is not lost youth but a new stage of opportunity and strength.” –Betty Friedan
When Leonard Nimoy left us earlier this year, the whole world mourned the passing of a beloved cultural icon. Even though he originally played Spock, the unemotional Vulcan, for a mere three years during the original TV run of Star Trek, he used it as a launching pad to explore a wide spectrum of interests.
“A very rich person should leave his kids enough to do anything, but not enough to do nothing.”
-Warren Buffet, as quoted in a September 29, 1986 interview with Fortune.
According to the consulting firm Accenture, boomer parents will be distributing about $30 trillion to their millennial descendants over the next 30-40 years. While it would seem that the subject would spark some lively and important inter-generational discussions, quite the opposite is true.
“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair.”
– Sam Ewing, Author
Did you drive a VW Bug in college? If you’ve ever been back behind the wheel of a Bug, it probably felt strange and made you wonder how you survived driving around in a little tin can on wheels! We might also view rotary phones, record players or our old “weekend fun” kit (a tote bag with a blanket, some sunscreen and a couple of Frisbees) as charming antiques.
“By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”
Whether we’re rich or poor, thrifty or overextended, inflation is as inevitable as death or taxes. But how high IS inflation? Is the Consumer Price Index a reliable guide? And what is the impact of underestimating inflation?
“The thought-provoking film is a timely reminder of the lessons from a financial crisis which are too quickly forgotten.”
~ Patrick Durkin, Sydney Morning Herald
Hollywood Tells the Story of the Lie That Crashed the Economy
Hollywood’s big screen version of The Big Short, based on Michael Lewis’s best-selling book on the financial crash, was released to DVD in March of 2016, following a successful run in theaters. Now six years after the 2010 release of the book, which detailed the story of a handful of stock market contrarians who saw that something was rotten on Wall Street, the message remains relevant as well as entertaining.
“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.”
-Ogden Nash, American poet
According to a May 13 article in Investopedia entitled “Stop Keeping Up With The Joneses – They’re Broke”, over 43% OF Americans spend more than they make. One financial journalist estimated that there are more than two million Americans carrying a credit card balance of more than $20,000. Most people making minimum payments (without taking on more debt) won’t pay off their cards for 24 years.
There are some common reasons for this: